Whatever Happened to K Street?

Yet another core sector of the American economy seems to be in trouble. After years of consistent growth, lobbying seems to be on the skids. According to figures compiled by the Center for Responsive Politics, lobbying expenditures doubled from 2001 to 2008, reaching $3.3 billion that year. Expenditures in 2009 and 2010 stabilized at around $3.5 billion. But 2011 looks grim, with only $2.4 billion reported so far.

It’s not just because the year hasn’t finished yet. Q2 was way down compared with 2010. Third quarter figures are also down by $42 million compared with 2010. There are also about 2400 fewer registered lobbyists than at the peak in 2007 when 14,869 Americans found their livelihood this way.

What accounts for the plight of this once-proud American industry? Here are some hypotheses:

Maybe the Supreme Court’s Citizens United decision has caused businesses to divert their political spending to the electoral process. Why spend money to persuade elected officials if you can spend the same money to ensure that your friends are elected?

Maybe there’s little need to lobby the House of Representatives because pro-business measures are guaranteed to pass anyway in the current Congress.

Maybe members of Congress are so closed-minded that there’s no point in trying to influence them, a sign of increasing polarization.

Maybe the abolition (or at least restriction) of earmarks has reduced the potential payoff from lobbying.

Maybe members of Congress are now too principled to be influenced by lobbyists.

Maybe Congress is so dysfunctional that there’s no point in lobbying: they won’t pass anything anyway.

Take your pick. With the exception of #5, however, most of these explanations aren’t really good news. About half of the total decline can be explained by reduced lobbying by business associations like the Chamber of Commerce, which might favor the first two hypotheses. Maybe someone like Nate Silver can figure out a clever statistical test.